Wall St. lovin' McDonald's sales

McDonald's Corp. shares hit a new 52-week high Tuesday morning as investors reacted to better than expected sales the Oak Brook-based fast-food giant posted for August.

Shares rose 3.6%, or $1.05, to $24.20 in early morning trading. By mid-afternoon the stock had declined to $23.57, up 22 cents or about 1% from Monday's closing price.

The jump came after McDonald's reported Monday that same-store sales, or sales at restaurants open 13 months or more, rose 3.8% in August, surprising analysts who had forecast a more modest rise in the lower single digits.

Sales at U.S. stores open at least 13 months rose 8.8%, marking the fifth consecutive month of improved results. Again, McDonald's beat analysts' expectations for a mid-single digit gain, according to Reuters.

CEO James Cantalupo attributed the increase to longer hours, efforts to improve customer service and new products like salads with Paul Newman's dressings and McGriddles breakfast sandwiches.

At least one analyst raised his outlook for McDonald's third-quarter sales, heartened by August results.

In a research note, J.P. Morgan's John Ivankoe boosted his outlook for third-quarter sales at stores open more than a year in the United States, McDonald's largest market, to 8% from a prior 6.5%.

"McDonald's did a very good job bringing out the salads and McGriddles, and that's what's driving the growth right now," said Carl Sibilski, restaurant stock analyst for Chicago-based Morningstar Inc. The August numbers, he said, "support the fact the company is doing something right."

An uptick overseas

In Europe, same-store sales rose 1%--the best results in well over a year. "Positive performance in several markets including France and Germany contributed to these results," Mr. Cantalupo said.

McDonald's last week launched its global "I'm Lovin' It" campaign that features Justin Timberlake in a new series of commercials for restaurant chain. The campaign also marks the 50-year-old company's first-ever attempt at a coordinated worldwide marketing program.

Systemwide sales, which include the company's franchised and company-owned restaurants, rose 10% to $4.2 billion. Same-store sales in the Asia Pacific, Middle East and Africa region, which include troubled economies like Japan, fell 4%, McDonald's said.